Passenger fares will get costlier from Sunday, as the levy of a service tax of 14% and a Swachh Bharat cess of 0.5% becomes chargeable.
A railway board circular on Friday projected a 4.35% increase in passenger fares in the First Class and all AC Classes from November 15.
This would work out to an increase of Rs. 206/- in the AC-I fares of Mail and Express trains from New Delhi to Mumbai and a hike of Rs. 102/- in the AC-3 fares from New Delhi to Howrah. Similarly, on the Delhi-Chennai route, the component of service tax and Swachh Bharat cess works out to an increase of Rs. 140/- in the AC-2 category.
The circular is in line with the November 6 notification for levy of a Swachh Bharat Cess on all taxable services.
Annual earnings of the Railways from the passenger segment are estimated at Rs. 35,000/-. More than Rs. 1000/- crore is expected to be added to this on account of the levy of service tax and Swachh Bharat cess.